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SHOPPERS STOP is declared ‘well-known trade mark’ by Delhi High Court

21st September, 2016: In a very recent decision of the Hon’ble High Court of Delhi, the Hon’ble High Court of Delhi has opined and declared that the mark ‘SHOPPERS STOP’ is a well-known trade mark under Section 2(zg) of the Trade Marks Act, 1999. The order dated 19th September, 2016 can be accessed here.

Patent (Amendment) Rules, 2016 come into force

The Patent (Amendment) Rules, 2016 have come into force from 16th May, 2016. The same can be accessed here

Some of the salient features of the same are :

Timeline for placing the application in order for grant, has been reduced to 4-months. Period is extendible by a max of 2 months upon payment of extension fees.

The rules provide for expediting examination of applications. An Applicant wishing to expedite issuance of a FER on his application can file a request with an enhanced fee. In addition to paying the enhanced fee, the Applicant has to provide undertaking in relation to manufacturing of products covered by the Patent.

Towards an attempt to reduce the applications pending for examination, provision to withdraw an already filed “request for examination” has been provided.

11th August, 2015: In a recent order passed by the Delhi High Court the Automobile Giant Audi AG has been restrained from using the mark ‘T.T.’ or any other deceptively similar mark. The said order has been passed ex-parte on the interim application of the proprietors of the mark ‘T.T.’ who essentially use the same, inter alia, for vests. The Plaintiff has claimed a user since 1968 and a sales of more than 700 Crores. The Plaintiff also relied on a series of trade mark registrations. Plaintiff claimed that in May, 2015 they came to know that the Defendant Audi AG is using the mark ‘T.T.’ for various products, including but not limited to leather products.

It is important to note that Audi AG has a commendable reputation in the mark ‘TT’ as well. However, that reputation, may or may not transcend to other products beyond it’s original use for cars. The injunction is a blanket injunction and in our opinion should not have been granted at ex-parte stage without the presence of the Defendant. It is a serious matter, as it is well-known that ‘Audi TT’ is a popular car and the Defendant has the right to extend his mark to other products as well, except in cases when the use of the same may cause confusion in the market towards source of the products.

July 9, 2015: RBI through its Notification dated July 9, 2015 made it mandatory to obtain approval for the following-

Any takeover or acquisition of control of an NBFC, whether or not it results in change of management;

Any change in the shareholding of an NBFC, including progressive increases over time, which would result in acquisition/ transfer of shareholding of 26% or more of the paid up equity capital of the NBFC. The approval will not be required in case of any shareholding going beyond 26% due to buyback of shares/ reduction in capital where it has approval of a competent Court. However, the same has to be reported to RBI not later than one month from its occurrence.

Any change in the management of the NBFC which would result in change in more than 30% of the directors, excluding independent directors. The approval is not required for those directors who got re-elected, on retirement by rotation.

A public notice of at least 30 days shall be given before effecting the sale of, or transfer of the ownership by sale of shares, or transfer of control, whether with or without sale of shares. Such public notice shall be given by the NBFCs and also by the other party or jointly by the parties concerned, after obtaining the prior permission of RBI

E-tailers like Amazon India, Flipkart, eBay may have to give out vendor sales data

May 29, 2015: Some of the state governments like, Delhi, U.P. and Kerala have asked e-commerce companies facilitating trades between buyers and sellers and acting as a market place, to provide monthly sales data for vendors registered on their platforms. The Delhi government wants ecommerce companies to provide details of vendors from elsewhere selling to buyers living in the state and vice versa. Kerala has made registration with the state tax department compulsory and asked companies to file monthly returns disclosing details of transactions including goods transported to and from the state. The Uttar Pradesh tax department has made it mandatory for air cargo operators, courier services and warehouses to get a service provider registration number and maintain records in the state for operating a business that involves taxable goods.

While invoices accompanying online purchases through these sites mention taxes levied, the states are looking to make sure there is no evasion of levies taking place through a complex web of delivery structures. The new disclosure norms are likely to add to the complexity and cost of e-commerce and more number of states is expected to follow the lead.

Amendment in Section 192A of the IT Act, 1961 re withdrawal of TDS from provident fund balance due to an employee

The Finance Act, 2015 has inserted a new section 192A regarding the payment of accumulated provident fund balance due to an employee. The Provision shall take effect from 1st June, 2015. Key provisions of the Amendment are-

Income Tax should be deducted at source at the following rates if at the time of payment, the accumulated PF balance is more than or equal to Rs. 30,000/- with service span of less than 5 years:

TDS will be deducted at 10% (provided PAN is submitted). In case Form No. 15G[1] or 15H[2] is submitted by the member then no TDS shall be deducted.

TDS will be deducted at maximum marginal rate (i.e. 34.608%), if a member fails to submit both PAN and Form No. 15G or 15H.

TDS shall not be deducted in respect of the following cases:

Transfer of PF from one account to another PF account;

Termination of service due to ill health of member, discontinuation/contraction of business by employer, completion of project or other cause beyond the control of the member;

If employee withdraws PF after a period of 5 years of continuous service, including service with former employer;

If PF payment is less than Rs, 30,000/- but the member has rendered service of less than 5 years;

If employee withdraws amount more than or equal to Rs. 30,000/-, with service less than 5 years but submits Form 15G/15H along with their PAN.

May 21, 2015: RBI increased the cap on Rupee Drawing Arrangements (RDAs) in trade-related remittances from the existing Rs. 5,00,000/- (Rupees Five Lakhs) to Rs. 15,00,000/- (Rupees Fifteen Lakhs) per transaction, with immediate effect. Under RDAs, inward remittances are received in India through Exchange Houses situated in Gulf countries, Hong Kong and Singapore. Prior approval of RBI is required for opening and maintaining rupee vostro accounts of non-resident Exchange Houses. (Read more about RDA here). The central bank also permitted authorized dealer banks to regularize payments exceeding the prescribed limit under the Rupee Drawing Arrangements, provided they are satisfied with the bona fide of the transaction.

May 20, 2015: The Central Board of Direct Taxes said the new service tax of 14% would be applicable from June 1, 2015. The notification came after the passage of the Finance Bill on 14th May 2015. The service tax is currently levied at the rate 12.36%, including education cess. The Budget had announced an increase in service tax from 12.36% to 14% for the financial year 2015-16. It had also announced widening of the definition of ‘service tax’ by removing certain items from the “Negative List” as provided in Section 66D of Finance Act, 1994 by way of an amendment to this section under Section 109 of Finance Act, 2015. With this amendment, certain services such as admission to entertainment events or access to amusement facilities, production of alcoholic liquor for human consumption have been removed from the Negative List, so that the omitted services are taxable.

May 15, 2015: The Securities and Exchange Board of India has dropped ‘20-25 rule’, which required a minimum of 20 investors and a cap of 25% on investment by an individual, for funds from low-risk foreign investors in order to simplify norms for domestic funds to manage offshore pooled assets. As per the current norms, a fund manager who is managing a domestic scheme is allowed to manage an offshore fund, subject to three specific conditions. Otherwise, a separate fund manager is required to be appointed for managing an offshore fund. SEBI through Securities and Exchange Board of India (Mutual Funds) Regulations, 2015 said the present restrictions would not apply “if the funds managed are of Category I foreign portfolio investors (FPIs) and/or Category II foreign portfolio investors which are appropriately regulated broad based funds.”

May 12, 2015: The Consolidated FDI Policy was released by the Department of Industrial Policy and Promotion (DIPP) on 12 May 2015 and came into force with immediate effect. Please note that FDI policy on foreign investment in the pension sector has not been consolidated in this Policy and should be read together with this Policy. Some of the key changes brought through this Policy are as follows-

Approval of the Foreign Investment Promotion Board (FIPB) will be required only in case of transfer of shares from one non-resident investor to another non-resident investor in sectors under the Government route, i.e. pharmaceuticals. However, FIPB approval will not be required for- (a) mergers or acquisitions taking place in companies engaged in automatic route sectors; (b) issue of ESOPs by companies engaged in automatic route sectors, and (c) additional foreign investment into an entity within an approved foreign equity percentage or in a wholly owned subsidiary.

In cases where the non-resident investor, including a non-resident Indian acquires shares on the stock exchanges under the FDI scheme, the responsibility of filing form FC-TRS with the AD Category-I bank would be on the investee company (and not on the transferor or transferee).

Earlier, proposals with total foreign equity inflow of more than INR 1,200 crore were required to be placed for consideration of Cabinet Committee on Economic Affairs (CCEA). The New Policy has now increased the threshold to INR 2,000 crore.

Pursuant to the RBI circular dated 14 July 2014, an Indian company whose activity/sector falls under the automatic route was not required to procure prior approval of the FIPB/Government for issue of partly-paid shares/warrants. However, the New FDI Policy provides that warrants and partly paid shares can be issued to non-residents only after approval through the Government route.

Equity shares issued against any fund payable by the investee company, remittance of which does not require prior permission of the Government of India or the RBI, is permitted, provided the equity shares are issued in accordance with the extant FDI policy.

May 10, 2015: The Supreme Court ruled that notice of dishonor of cheques to the company is sufficient, and there is no need to serve separate notices on the directors. The directors are supposed to know about the dishonor when the company gets the notice. The Supreme Court overruled the Bombay High Court which had maintained that separate notices were essential. Analyzing Sections 138 and 141 of the Negotiable Instruments Act, the Supreme Court said “There is nothing in Section 138 which may even remotely suggest issuance of notice to anyone other than the drawer (the company). Section 141 again does not lay down any requirement that the directors must individually be issued separate notices. The persons running the affairs must naturally be aware of the notice issued to such company.

April 28, 2015: Parliament passed Payment and Settlement Bill, 2014 which amends the Payment and Settlement Systems Act, 2007, which was enacted to regulate and supervise payment systems in India. The Act designates the RBI as the authority to regulate payment systems, including inter-bank transfers such as the NEFT, RTGS, ATMs, credit cards, etc. The Bill seeks to address the problem of insolvency in the payment and settlement system by increasing transparency and stability. The Bill is also aimed at bringing the India’s banking payment system in line with the international practices. it seeks to extend the application of the Act to a designated trade repository, or issuer, in relation to payment systems. The Bill modifies the provisions of the Act to provide that the final settlement would not be affected even in cases where the court or tribunal has appointed a liquidator. It further clarifies that this would apply to any settlement made prior to such order or immediately thereafter. The Bill introduces a new provision which empowers the RBI to direct system providers of a payment system to ensure protection of funds collected from customers. To this end, system providers must: (i) deposit in a separate bank account; or (ii) maintain liquid assets of an amount equal to such percentage of the amounts collected by the system provider from its customers and remaining outstanding, as specified by the RBI.

April 27, 2015: The government has raised the limit of foreign direct investment in pension sector to 49 per cent in line with the FDI cap in the insurance sector thorough Press Note No. 4 (2015 Series). A press note to this effect was issued by the Department of Industrial Policy and Promotion (DIPP) according to which, no government approval is required till 26 per cent. However, Foreign Investment Promotion Board (FIPB) nod would be needed for investment beyond 26 per cent and up to the cap of 49 per cent. All investments in the pension sector, however, will have to abide by the pension sector regulator, PFRDA. The FDI can be made in this sector in the forms of FPI, FII, QFI, FVCI, NRI and DR.

April 15, 2015: Madras High Court recently in Hyundai Motor India Limited vs. Competition Commission of India clarified that under the Competition Act, 2002 (“the Act“), Director General (“DG“) cannot initiate an investigation sou motu. The process should be that DG should submit information to CCI, and then CCI should cause an inquiry under Section 19 of the Act and order for an investigation and thereafter DG can initiate investigation. It also clarified that CCI is not required to form a prima facie opinion before initiating an investigation upon receipt of information pertaining to the same subject matter. In this case, a complaint was lodged before the CCI alleging anti-competitive practices and abuse of dominant position against three automobile manufacturers. The Delhi High Court in an earlier case, Grasim Industries Limited v. Competition Commission [(2014) 41 Taxmann 333 (Delhi)] had held that the DG would have no power to undertake an investigation in respect of the complaint which the Commission did not consider while forming an opinion. However, the Madras High Court has now differentiated this decision of the Delhi High Court on facts by stating that the DG did not go beyond the scope of his powers as he was merely providing additional information in relation to the subject of which the CCI already had knowledge. Hence, the proviso to Section 26 (1) of the Act inserted by the Competition (Amendment) Act, 2007 would apply as the information received from the DG was simply additional information pertaining to the same subject matter of complaint.

April 8, 2015: In terms of Schedule 1 to RBI Notification dated May 3, 2000, 26% of FDI is permitted under Automatic route in Insurance sector subject to conditions specified therein. In order to further liberalize the extant FDI policy for this sector, Government of India, by a notification dated February 19, 2015, notified the Indian Insurance Companies (Foreign Investment) Rules, 2015 (“Rules”) permitting up to 49% of the paid up equity capital, subject to the revised conditions specified in the Press Note 3 (2015 Series) dated March 2, 2015. FDI in this sector, up to 26% shall be under automatic route and beyond 26% and up to 49% shall be with Government approval. FDI in the Insurance sector is currently subject to compliance of the provisions of the Insurance Act, 1938 and the condition that companies bringing in FDI shall obtain necessary license from IRDA for undertaking insurance activities. Furthermore, a new activity, “Other Insurance Intermediaries appointed under the provisions of Insurance Regulatory and Development Authority Act, 1999 (41 of 1999)” has been included within the definition of ‘Insurance’.

April 7, 2015: RBI has tightened the rules for granting long-term export advances to curb the practice of using trade finance to retire old rupee loans. The facility for long-term export advances was primarily being utilised for refinancing rupee loans of borrowers, instead of using it to execute long-term supply contracts for export of goods. The foreign currency borrowing and export advances or support obtained from lenders (part of Indian banking system) for refinancing will be treated as restructuring. This is applicable to a borrower who is under financial difficulty and involves concessions that the bank would otherwise not consider. The repayment or refinancing of foreign currency borrowings with a bank by the rupee or other foreign currency loans or support (such as guarantees) from lenders (part of Indian banking system) will also be treated as restructuring and the financial difficulty would cover instances including repeated undue delay in timely payment of installments (principal and interest) on term loans and failure to pay statutory liabilities. The foreign currency borrowings / advances and support could be permitted for refinancing if it is obtained from a lender who is not part of Indian banking system. RBI has permitted exporters to receive long-term export advance to execute long-term supply contracts for export of goods. They are also allowed to use such export advances to liquidate rupee loans which are not classified as non-performing assets.

March 30, 2015: MCA issued a notification on March 30, 2015 to clarify applicability of Companies (Acceptance of Deposits) Rules 2014. Prior to this notification, there was an ambiguity as to whether amounts received by private companies from their members, directors or their relatives prior to 1st April, 2014 should be considered as ‘deposits’ under the Companies Act, 2013, as such amounts were not treated as ‘deposits’ under Section 58A of the Companies Act, 1956 and rules made thereunder. After examining this issue, MCA in consultation with RBI, clarified on March 30, 2015 that such amounts received by private companies prior to 1st April, 20l4 shall not be treated as ‘deposits’ under the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014, subject to the condition that relevant private company shall disclose, in the notes to its financial statement for the financial year commencing on or after 1st April, 2014 the figure of such amounts and the accounting head in which such amounts have been shown in the financial statement. This means any renewal or acceptance of fresh deposits on or after 1st April, 2014, however, must be in accordance with the provisions of Companies Act, 2013 and rules made thereunder.

March 31, 2015: MCA came up with an amendment to the Companies (Acceptance of Deposits) Rules, 2014 according to which unless otherwise required under the Companies Act, 1956 or the SEBI Act, 1992 or rules or regulations made thereunder, “if a company receives any amount by way of subscriptions to any shares, stock, bonds or debentures before the 1st April, 2014 and disclosed in the balance sheet for the financial year ending on or before the 31st March,2014 against which the allotment is pending on 31st March, 2015, the company shall, by the 1st June, 2015, either return such amounts to the persons from whom these were received or allot shares, stock, bonds or debentures to comply with these rules.”

March 25, 2015: The Bombay High Court encountered a combined claim of copyright infringement and misuse of confidential information brought by the Plaintiffs, Beyond Dreams Entertainment (“BDE”), with regards to certain scripts and concept notes of a particular Hindi television show which BDE had handed over to the Defendants, Zee Entertainment (“Zee”). Zee was supposed to telecast the show. However, negotiations failed and the show was never telecast. Later, Zee allegedly went on to create a new show based on the concept notes shared by BDE. BDE sued Zee to restrain the telecast of this new show developed by Zee. The claim was that Zee had breached BDE’s confidence by using their scripts and production notes in the development of their new show and also infringed their copyright in them. It was observed by the Single Judge bench of Bombay High Court that protection of confidence is a broader right than the proprietary right of a copyright. Bombay High Court observed that a publication could be restrained on account of breach of confidence. The judge said “Whereas there can be no copyright in an idea or information per se, if the idea or information has been sufficiently formed and has been acquired by a person under such circumstances that it would be a breach of good faith to publish or use the same without authority from the person from whom it has been so acquired so acquired, the Court may in an appropriate case protect the idea or information by granting an injunction.” The judgment also clarified the process adopted to determine novelty in the case of a claim of breach of confidence.

March 24, 2015: Supreme Court in its landmark judgment, Shreya Singhal vs. Union of India on March 24, 2015, struck the Section 66A of the Information Technology Act which provided punishment for sending offensive messages through communication service, including internet. It is to be noted that Section 66A was not in the Act as originally enacted, but came into force by virtue of an Amendment Act of 2009 with effect from 27.10.2009. Supreme Court in this case held that Section 66A severely curtails information that may be sent on the internet. Section 66A, not being saved under Article 19(2), must, therefore, fall foul of Article 19(1)(a), be declared as unconstitutional. Section 66A arbitrarily, excessively and disproportionately invades the right of free speech and upsets the balance between such right and the reasonable restrictions that may be imposed on such right. It further held that Section 66A has nothing to do with “incitement to an offence” and it has no element of any tendency to create public disorder which ought to be an essential ingredient of the offence which it creates. The Apex Court observed that there is no demarcating line conveyed by any of the expressions used in this Section and this is what renders the Section unconstitutionally vague. It further held that Section 66A is unconstitutional also on the ground that it takes within its sweep protected speech and speech that is innocent in nature and is liable therefore to be used in such a way as to have a chilling effect on free speech and would, therefore, have to be struck down on the ground of over-breadth. As regards severability, it was held that no part of Section 66A is severable and the provision as a whole must be declared unconstitutional. The bench upheld the provisions and the guidelines making intermediaries liable for removing objectionable content on being notified by the government.

March 23, 2015: Recently, in the Union Budget 2015, Finance Minister Arun Jaitley had announced that the first International Financial Service Centre (IFSC) centre in India shall be set up in Gujarat International Finance Tec-City (GIFT), near Ahmedabad. In line with SEZs, International IFSCs are hub of financial services with laws and regulations different from the rest of the country. Usually these centres have low tax rates and flexible regulations for securities and currency trading, banking and insurance, which makes them attractive for foreign investment. These centres deal mainly with the flow of money, financial product and services across borders. To operationalize the IFSC, a notification under the Foreign Exchange Management Act, 1999 (FEMA) was issued by Reserve Bank of India (RBI) on March 23, 2015, namely the Foreign Exchange Management (International Financial Service Centre ) Regulations, 2015, making regulations relating to financial institutions set up in the IFSC. The key features of these regulations are that any financial institution (or its branch) set up in the IFSC: (a) shall be treated as a non-resident Indian located outside India; (b) shall conduct business in such foreign currency and with such entities, whether resident or non-resident, as the Regulatory Authority may determine, and (c) subject to section 1(3) of FEMA, nothing contained in any other regulations shall apply to a unit located in IFSC.

March 19, 2015: Supreme Court of India in Dhropadabai and Others vs. M/s. Technocraft Toolings (C.A. No. 8155 of 2014) recently ruled that employees insured under the Section 2(14) of the Employee State Insurance Act, 1948 is not entitled to any compensation from the employer under the Workmen Compensation Act, 1923. The brief facts of this case is that the legal successor of the deceased was earlier awarded compensation to the tune of INR 3 lacs with and 18 per cent interest under the 1923 Act. The employer in its defense claimed that the legal heirs of the deceased employee were not entitled to any compensation under the Workmen Compensation Act as he was insured under the Employee State Insurance Act. The Apex Court ruled that the deceased employee was clearly an ‘insured person’, within the meaning of ESI Act. It further held that since the deceased employee had suffered an employment injury as defined under Section 2(8) of the ESI Act and there was no dispute that he was in employment of the employer, by operation of Section 53 of the Act, no proceedings under the Workmen Compensation Act was statutorily permissible.

March 18, 2015: Ministry of corporate Affairs amended Companies (Share capital and Debentures) Rules, 2014 (“Rules”). The amended rules provides that “in case of any preferential offer made by a company to one or more existing members only, the provisions of sub-rule (1) and proviso to sub-rule (3) of rule 14 of Companies (prospectus and Allotment of Securities) Rules, 2014 shall NOT apply.

March 17, 2015: High Court of Punjab and Haryana in State of Punjab and Ors. vs. Kamaljit Sharma and Ors. [CWP No. 20489 of 2012 (O&M)] held that the compensation to a workman has to be accompanied with the order of retrenchment. In this case, P&H High Court relied on Supreme Court’s judgment in Bhuvnesh Kumar Dwivedi vs. Hindalco Industries Ltd. [2014 (6) JT 190], wherein Apex Court had held that where the Labour Court has termed the retrenchment of the workman ab initio, void, illegal, nullity or non est, the fact remains that once the workman has not been given one month’s notice or pay in lieu thereof and compensation in terms of Section 25F (a) and (b) of the Industrial Dispute Act, it would have the effect of rendering the action of the employer as nullity and the employees would be entitled to continue in employment as if his services were not terminated. Accordingly, P&H High Court in this case decided that since the services of the workmen were retrenched in complete violation of provisions of Section 25F of the I.D. Act, the workmen were entitled to reinstated into service with continuity of service.

February 3, 2015: RBI and SEBI have come up with circulars, both dated February 3, 2015 restricting Foreign portfolio investors (FPIs) from investing in corporate bonds with residual maturity of less than 3 years. The restriction applies to all future investments by FPIs into Bonds. Existing holdings of Bonds by FPIs can continue to have call / put options and be redeemed prior to 3 years. The Circulars, however, do not clarify whether in case of default, the Bonds can be redeemed prior to 3 years upon enforcement of security. In the absence of such clarification, even redemption upon enforcement prior to 3 years would require regulatory approvals. Usually FPIs are permitted to invest in government securities (“G-Sec”) and Bonds. To encourage more patient capital, the RBI had earlier restricted FPIs from investing in G-Sec having a minimum residual maturity of less than 3 (three) years. No such restriction was previously imposed on Bonds issued by corporate.

FPIs now do not have any lock-in for such investments, and are free to sell it any time; provided however, if less than 3 (three) years is pending to maturity, FPIs can sell the Bonds only to persons resident in India. FPIs are also not permitted to invest in liquid and money market mutual fund schemes nor can they invest in Bonds with maturity over 3 (three) years but having optionality clauses exercisable within 3 (three) years.

January 28, 2015: In a very recent case, Keshavlal Khemchand and Sons Pvt Ltd & Ors v. Union of India & Ors.[2015(1)SCALE709], Supreme Court dealt with constitutional validity of the definition of Non Performing Assets (“NPA”). The amended definition has been the bone of contention in various high courts across the country. While Gujarat High Court by a common judgment dated April 24, 2014 held that the amended Section 2 (1) (o) of the SARFAESI Act is unconstitutional, on the other hand, in another common judgment dated May 18, 2014, the Madras High Court rejected the challenge. The key issues in this case were- (a) whether by delegating the responsibility to an authority or body to frame the guidelines for asset classification under the amended definition of NPA amounts to delegation of essential legislative function, and (b) whether the different standards for arriving at the definition of NPA amounts to a violation of Article 14 of the Constitution. The Apex Court in this case upheld the constitutional validity of amended definition of “non-performing assets” under SARFAESI Act. Furthermore, it observed that the function of prescribing the norms for classifying a NPA is not an essential legislative function and since all creditors do not form a uniform/homogenous class, prescribing different norms for the identification of a NPA with reference to different creditors, does not amount to unreasonable classification. Thus, the Supreme Court in this case provided much required clarification regarding NPA as there existed conflicting decisions by two different High Courts on the constitutional validity of the amended definition of NPA.

January 7, 2015: As per RBI Notification released on 07.01.2015, except in very rare cases, non-promoter/non-whole time directors (Nominee and Independent directors) in the management of a company’s debt contracts cannot be considered as a wilful defaulter of a loan unless it is conclusively established that- (a) he was aware of the fact of wilful default by the borrower by virtue of any proceedings recorded in the Minutes of the Board or a Committee of the Board and has not recorded his objection to the same in the Minutes, or, (b) the wilful default had taken place with his consent or connivance.

January 1, 2015: With a view to liberalising, expanding the options of securities and consolidating various provisions related to creation of charge over securities for ECB at one place, RBI amended certain provisions of ECB Guidelines. As per RBI Notification dated 01.01.2015, creation of charge on immovable assets during the currency of the ECB with security co-terminating with underlying ECB, shall be subject to provisions contained in the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000. The permission to create charge over the immovable property should not be construed as a permission to acquire immovable asset (property) in India, by the overseas lender / security trustee. In the event of enforcement/invocation of the charge, the immovable asset/property will have to be sold only to a person resident in India and the sale proceeds shall be repatriated to liquidate the outstanding ECB. As regards, creation of charge over financial securities, pledging of shares of the borrowing company held by the promoters as well as in domestic associate companies of the borrower will be permitted. Similarly, pledging of other financial securities, viz. bonds and debentures, Government Securities, Government Savings Certificates, deposit receipts of securities and units of the Unit Trust of India or of any mutual funds, standing in the name of ECB borrower/promoter, will also be permitted. In case of invocation of pledge, transfer of financial securities shall be in accordance with the extant FDI/FII policy including provisions relating to sectoral cap and pricing as applicable read with the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000. These amendments to the ECB guidelines shall come into force with immediate effect.

December 29, 2014: RBI, vide its recent Notification dated 29.12.2014 eased rules on borrowing money to invest overseas. This was done to make it easier for domestic companies to borrow money and invest it overseas. Under the new rules, companies can use a charge on their assets as security for the loans which previously required prior approval from the central bank. Companies can also use shares in overseas joint ventures as security. Also, the new rules require that the funds raised through either method should be used for the company’s core business activities overseas and not for investing back in India.

December 23, 2014: The Full Bench of the Bombay High Court, in a reference made to it, in the matters of Lupin Ltd vs. Johnson and Johnson (“Lupin Case”) and Shakti Bhog Foods Ltd vs. Parle Products Pvt Ltd., [2015(61)PTC1(Bom)]held that although validity of a trademark can be finally determined only by the Intellectual Property Appellate Board, there is no bar on civil courts to consider a challenge to the validity of a trademark at interlocutory stage. Earlier to this case, there have been conflicting judgments of various courts on the issue in question. This judgment provides clarity that a court can examine the question of validity of registration of a trademark in an infringement suit only if the registration of the trademark was ex facie totally illegal, fraudulent or shocks the conscience of the court. Thus, the Court in this case tried to strike a balance between the rights of the plaintiff, who has obtained registration of a trademark following the process of law and that of the defendant who faulted by not raising an objection to the registration of the trademark at the right time, as contemplated by the Act.

December 08, 2014: An ex parte injunction order was claimed by Ericsson in Telefonaktiebolaget LM Ericsson vs. Xiomi Technology & Ors. (I.A. No. 24585/2014 in CS(OS) 3775/2014; Order dated 08.12.2014) against Chinese operator Xiaomi for infringement of its patent rights with respect to certain Standard Essential Patents (SEPs), which are subject to Fair, Reasonable and Non-Discriminatory (FRAND) terms. Notably, these patents are the same patents which are currently subject matter of litigation mounted by Ericsson against Micromax, Gionee and Intex. The Applicant, Ericsson in this case alleged that despite its proposals to Xiaomi to obtain a license to use the patents, not only did Xiaomi bypass it and enter the Indian market in July, it also set up an Indian subsidiary Xiaomi technology India Pvt. Ltd.. The defendant on the other hand averred that mere failure to reply cannot be a sufficient ground to grant injunction.

The hon’ble High Court of Delhi in the case passed an ex parte order forbidding the popular Chinese manufacturer (Xiaomi) from importing and selling its smart phones in India. The controversy involved in this case is the haste with which the High Court granted the injunction. It is noteworthy to mention that when the same patents are potentially in question under other suits as well, there was no need for the Courts to rush to grant an injunction against a new defendant, Xiaomi. Furthermore, Article 51 of TRIPS agreement stipulates border control mechanisms for copyright and trademark related matters only and not for patents. Read more

December 5, 2014: Supreme Court in a recent case M/s MSP Infrastructure Ltd v/s M.P. Road Development Corporation Ltd. [Civil Appeal No.10778 of 2014]prohibited belated backdoor challenge to the jurisdiction of an arbitral tribunal. The Apex Court in this case held that party to an arbitration proceeding can object to the jurisdiction of the tribunal on or before the submission of the statement of defense. Furthermore, it observed that the jurisdiction of a civil court can be challenged at any stage with the rider that such a settled rule of law does not apply to arbitrations as they are governed under the Arbitration and Conciliation Act, 1996, which is a special law.

November 25, 2014: The Supreme Court of India in M/s. Hyder Consulting (UK) Ltd. v. Governor State of Orissa [2014(13)SCALE169], considered the much debated question of whether post-award interest can be awarded by an arbitral tribunal on pendite lite interest under Section 31(7) of the Arbitration and Conciliation Act, 1996 (“ Act”). The Apex Court also interpreted the word ‘sum’ used in Section 31(7), sub-clauses (a) and (b) of the Act to be an amount of money that could include principal or interest or both. The majority in this case disagreed with the judgment in S.L. Arora case [(2010)3 SCC 690] in which it was held that unless stated in the contract, the tribunal did not have the power to provide for interest on pre-award interest. The Hon’ble Court stated that post award interest, as prescribed under Section 31(7)(a) of the Act, would also be applicable to the interest pendent lite and not merely the principal amount awarded by an arbitral tribunal. On a comparison with Section 34 of CPC, it was held that the language of Section 31(7) of the Act was different and evidently intended to have a different effect. The Apex Court further held that Section 34 of CPC empowered the Court to award interest “on the principal sum” and not merely the “sum” as provided under Section 31(7) of the Act. Thus, the ambit of Section 31(7) of the Act was to include the pre-award interest awarded along with the principal sum. Had that not been the case Section 31(7) of the Act would have had the same language as the Section 34 of the CPC.

November 19, 2014: The erstwhile SEBI (Prohibition of Insider Trading) Regulations, 1992 has finally been replaced with the SEBI (Prohibition of Insider Trading) Regulations, 2014. The new regulation has broadened the definition of ‘insider’ to include- (a) persons connected on the basis of being in any contractual, fiduciary or employment relationship that allows such person access to ‘unpublished price sensitive information’ (UPSI); (b) immediate relatives (with the power to rebut such presumption). In case of connected persons, the onus of establishing, that they were not in possession of UPSI shall lie on such connected persons. The narrow definition of UPSI which earlier had reference to company only, has now reference to securities as well and the definition is further made stronger by making it subject to the test to identify price sensitive information, aligning it with listing agreement and providing platform of disclosure. The requirement of communication of UPSI in the case of legitimate business transaction has been duly recognized and the same can now be communicated with appropriate safeguards. Considering every investor’s interest in securities market, advance disclosure of UPSI at least 2 days prior to trading has been made mandatory in case of permitted communication of UPSI.

October 27 2014: A three-judge bench of the Supreme Court in KSL & Industries Ltd. vs. Arihant Threads Ltd. [2014(12)SCALE313, Civil Appeal No. 5225/2008] dealt with the question whether the bar under Section 22 of the SICA would be applicable in view of a non-obstante clause in Section 34 of the RDDBFI. The Apex Court in this case held that Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), which deals with suspension of legal proceedings, contracts, etc. and provides a kind of immunity to the sick companies, can also be extended to a recovery application made under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act) which means that the bar under Section 22 of SICA is very much applicable to a recovery application filed under RDDBFI Act as well. It was further held that Section 22 of SICA would prevail over the provision for the recovery of debts in the RDDBFI. The rule of generalia specialibus non derogant means a general Act is not to be construed to repeal a previous special Act, unless there is some express reference to the previous legislation on the subject, or unless there is a necessary inconsistency in the provisions of two Acts standing together. The Supreme Court in this case also observed that such a rule of statutory interpretation should not be given a mechanical application and thus adopted purposive rule of interpretation giving effect to the intention of the legislature. It accordingly held that Section 22 of SICA should be given a purposive and wider interpretation in light of the purpose of its enactment and must be held to be special Act. With reference to LIC v. D.J Bahadur [(1981) 1 SCC 315], the Apex Court in this case reiterated that in order to determine whether a statute is a special or a general one, the emphasis must be on the principal subject matter and the perspective which means that for some purposes, an Act may be special and for some other purposes it may be general.

October 15, 2014: Delhi High Court in World Wresting Entertainment, Inc. v. M/s Reshma Collection & Ors. (FAO(OS) No. 506 of 2013) held that a website selling goods online amounts to “carrying on business” by the Plaintiff under the Copyright Act, 1957 and Trade Marks Act, 1999. Accordingly, a plaintiff having virtual but not physical presence can also institute a suit for copyright or trade mark infringement. The Delhi High Court observed that the availability of goods through a website at a particular place is virtually the same thing as a seller having a physical shop in the same place. Division Bench of the High Court in this case further held that the online sale of merchandise to customers in Delhi by World Wresting Entertainment, Inc. amounted to ‘carrying on business’ in Delhi, under Section 62(2) of the Copyright Act, 1957 and Section 134(2) of the Trade Marks Act, 1999. The Court held that WWE carried on business’ in Delhi by virtue of its sales effected through its website accessed/accessible in Delhi and thus jurisdiction was conferred on the Delhi High Court to try a suit for trademark and copyright infringement.

September 23, 2014: In a recent order passed by the Delhi High Court in Deepa Malik v/s Royal Life Care Diagnostic private Ltd., CS(OS) No. 2915 of 2014, the Delhi High Court restrained the defendant from using the photograph, name, signature, and awards of the renowned athlete, Deepa Malik, on its products. The act was considered as being infringement of plaintiff’s personality rights. This is probably India’s first case in which the personality rights of an athlete is upheld. Earlier, Courts in India had upheld the personality rights involving celebrities like, Amitabh Bachchan, Shilpa Shetty and Rajnikanth. The copy of the Order dated September 23, 2014 is not yet published by the Delhi High Court.

September 22, 2014: The Division Bench of Bombay High Court in S. Kathotia and Anr. v. Milton Global Ltd. and Ors. (Appeal No. 366 of 2014; Arbitration Petition No. 66 of 2014) held that in an arbitration agreement between two groups, group entities which are not signatories to the agreement may also be made party to the arbitration agreement if they are referred to in the contract. The judgment reiterates that an arbitration agreement ought to be construed in a broad and common sense manner and no term / phrase should be treated as meaningless, especially if they are consistent with the other parts of the agreement. In this case, the joint venture agreement had elaborate references to the ‘Vaghani Group’ and the ‘Subhkam Group’ and their authorized representatives had been appointed. The joint venture agreement also specifically stated that while there were multiple parties, they belonged to either the Vaghani Group or the Subhkam Group.

The Court observed that the joint venture agreement was entered into between the ‘Vaghani Group’ and the ‘Subhkam Group’, and not between specific individuals and / or entities. Thus, the immediate relatives and the entities controlled by the respective groups (who were admittedly not signatories to the joint venture agreement), were also held to be bound by the terms of the joint venture agreement. It is to be noted that the principle of ‘liberal interpretation’ was extended in this case to include the non-signatory related entities of a company / person, which may be considered as parties to an arbitration agreement and thus, bound by the dispute resolution mechanism without even being signatories. The case is an eye-opener for the parties before they enter into agreements containing an arbitration agreement so that they can consciously determine if they desire to bind their related parties/group entities to the agreement.

Supreme Court Widens Scope of ‘Public Policy’

September 04, 2014: The Supreme Court of India in ONGC v. Western Geco international Ltd.(Civil Appeal No. 3415 of 2007) widened the scope and ambit of “public policy” under Section 34 of the Arbitration and Conciliation Act, 1996. In this case, the Court, for the first time, defined, albeit non-exhaustively, the term “fundamental policy of Indian law” which is an ingredient of “public policy” under Section 34 and 48 of the Act. The key observations in this judgment were-

Arbitral Awards maybe set aside if they violate the fundamental policy of Indian law;

Fundamental policy of Indian Law includes:

Judicial Approach: No Tribunal or court to act in an arbitrary, capricious or whimsical manner;

Principles of Natural Justice: Principles of natural justice to be followed and reasoned decisions to be made,

Wednesbury’s principle of reasonableness: No decision should be perverse such that no reasonable person would arrive at it.

If the above principles are not followed by an arbitral tribunal, the award passed would be open to challenge under Section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996.

The Court’s indication that a detailed scrutiny into the merits of the award may be undertaken may now widen the court’s powers under Section 34 and 48 of the Act to an appeal. The principles enunciated in the present case, being part of “fundamental policy of Indian law” are applicable to domestic and foreign awards alike.

August 26, 2014: RBI released a note along with a poster and a booklet simplifying Know Your Customer (KYC) norms for opening bank accounts. Now, there is no requirement of submitting two separate documents for proof of identity and proof of address. If the officially valid documents (“OVDs“) submitted for opening a bank account has both, identity and address of the person, there is no need for submitting any other documentary proof. OVDs for this purpose would include: Passport, driving licence, voters’ ID card, PAN card, Aadhaar letter issued by UIDAI and Job Card issued by NREGA signed by a State Government official. Also, migrant workers, transferred employees, etc., can now submit only one proof of address (either current or permanent) while opening a bank account or while undergoing periodic updation. If the current address is different from the address mentioned on the proof of address submitted by the customer, a simple declaration by her/him about her/his current address would suffice. Furthermore, once KYC is done by one branch of the bank, it is valid for transfer of the account to any other branch of the same bank.

August 25, 2014: Bombay High Court in its ruling in Mr. Ramanbhai Mathurbhai Patel vs. State of Maharashtra & Anr.held that all the cases of cheque bouncing, where the cheque was payable at all branches of the bank, can be filed in the court within whose local jurisdiction the nearest available branch of Drawer’s bank was situated. You can read the full summary of this case here.

August 22, 2014: RBI had earlier issued directives on February 18, 2009 and December 31, 2010 making it mandatory for banks to put in place additional authentication / validation based on information not visible on the cards for all on-line card not present (CNP) transactions (e-commerce / IVR / MOTO / recurring based on standing instructions). On October 25, 2010, it clarified the applicability of the above directives on the nature of card not present transactions saying that the mandate shall apply to all transactions using cards issued in India for payments on merchant sites where no outflow of foreign exchange is contemplated. It was further stated that the linkage to an overseas website/payment gateway cannot be the basis for permitting relaxations from implementing the mandate.

In this directive issued on August 22, 2014, RBI clearly stated that-” where cards issued by banks in India are used for making card not present payments towards purchase of goods and services provided within the country, the acquisition of such transactions has to be through a bank in India and the transaction should necessarily settle only in Indian currency, in adherence to extant instructions on security of card payments.” The directive was issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007.

August 14, 2014. In this historic judgment, Director of Income Tax vs. Copal Research Ltd., Mauritius, the High Court of Delhi ruled that transfer of shares of a foreign company by one overseas entity to another will not trigger capital gains tax in India if the seller derives less than 50% of its value from assets in India. The judgment has drawn attention from all the top tier law firms, legal academia and foreign investors. For instance, Nishith Desai Associates, a law firm, quoted in its reporting of the judgment that it “provides much needed clarity to foreign investors on the applicability of indirect transfer tax provisions, as being one of the first judgments to have delved into the meaning, scope and extent of the term “substantially” in the context of indirect transfers.

August 1, 2014: Supreme Court this month in Dashrath Rupsingh rathore vs. State of Maharashtrastruck a discordant note on certain aspects of territorial jurisdiction which have for long been considered settled by earlier decisions of the Supreme Court. The Apex Court in this case after referring to all the precedents on this issue held that an offence within the contemplation of Section 138 is complete with the dishonour of the cheque but taking cognizance of the same by any Court is deferred so long as the complainant does not have the cause of action to file a complaint in terms of Clause (c) of the proviso read with Section 142. Once the cause of action accrues to the complainant, the jurisdiction of the Court to try the case will be determined by reference to the place where the cheque is dishonoured by the bank on which it is drawn.

July 30, 2014: Delhi High Court in Zaheer Mauritius Vs. Director of Income Tax held that transfer of a ‘Compulsorily Convertible Debenture’ to a third party is taxable as ‘capital gains’ and not ‘interest’ and mere provision of exit options does not change the nature of the investment. The issue in the present case was whether the gains arising in the hands of the petitioner, a company incorporated under the laws of Mauritius, from transfer of its investments in the JV, is ‘interest’ or ‘capital gains’. The Respondent argued that the transaction was essentially a loan transaction and the returns on the investment were simply interest, liable to be taxed in India, which was rejected by the Delhi High Court.

July 15, 2014: The Bombay High Court, recently in its judgment Bayer Corporation vs. Union of India upheld the order of the IPAB, which had earlier affirmed the order of the Controller of Patents to grant Compulsory License to NATCO for Bayer’s Indian patent on Sorafenib Tosyalte (Nexavar). The judgment gives certain new interpretations to the conditions that needs to be fulfilled for grant of Compulsory License under the Indian Patents Act, 1970 . The judgment holds significance because it will have a bearing on subsequent applications for Compulsory Licenses in India. The key observations of the Court were as follows-

“adequate extent” for meeting the demand of the patented product may differ based on the nature of patented product. As regards medicine, such extent has to be 100% of the requirement and the patented drug should be made available to every patient.

dual pricing can be applied to meet the requirement of the public and not for making available the drug under reasonably affordable price;

the sale by the infringer of a patent can be taken into account in order to meet the reasonable requirement of the public only where the patentee has granted a de facto license, which means where has not filed a patent infringement suit against the infringer;

the investment made by the patentee in developing the patented drug can be an important factor in determining whether the patented drug is available at reasonably affordable price;

reasonable requirement of the public can only be determined on the basis of evidences produced by the parties and not on any mathematical formula;

a patent can be worked in India by importing the patented product in adequate quantity and supplying it. However, working by import can be permissible only when the patentee provides plausible reasons for not manufacturing the patented product in India.

July 15, 2014: The existing pricing guidelines in respect of transfer/issue of shares and for exit from investment in equity shares with or without optionality clauses of listed/unlisted Indian companies have been revised by RBI so as to provide greater freedom and flexibility to the parties concerned under the FDI framework.

In respect of unlisted companies, the changes in the existing pricing guidelines for FDI applicable to transfer/issue of shares and for exit from foreign direct investment with optionality clauses are specifically provided in the Annexure 1 and Annexure 2 respectively, of this RBI Circular dated July 15, 2014.

July 2, 2014: The Supreme Court of India in a judgment, McLeod Russel India Limited vs. Regional Provident Fund Commissioner, Jalpaiguri and Others, [2014(8)SCALE272] on July 2, 2014, held that the successor employer is liable to pay damages for any default in remitting provident fund (social security) contributions. In this case, although the default was committed by the transferor entity prior to the date of transfer of employees, the Apex Court clarified that the successor employer/transferee cannot be absolved from the liabilities even if such liabilities have been specifically assigned to the transferor entity through an express agreement. The major observations of the Court were as follows-

inter-se covenants between the two entities would not absolve the new employer from the rigours of damages imposed by the Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 (“EPF“);

owing to the the language of Section 17 B which clearly uses the phrase “contributions and other sums due from the employer”, the Transferee Company can be made liable for ‘damages’;

This decision assumes significance as it provided much needed clarity on liability of the successor employer with respect to EPF in case of transfer of an establishment. With this judgment, it become all the more important to do a thorough due diligence, especially regardingemployment related aspects of the transaction by carefully assessing the dues, damages and liabilities under the EPF and other applicable laws.

June 9, 2014: RBI has further simplified the KYC norms for the benefit of customers. You can now submit only one documentary proof of address (either current or permanent) while opening a bank account or while undergoing periodic updation by your bank. In case the address you have mentioned as per ‘proof of address’ changes, you can submit the fresh proof of address to your bank within a period of six months.

It is also possible that the proof of address furnished by you or where you are currently residing, may not be your local address. In such a case the bank may take a declaration of the local address from you on which they can make all correspondences with you. Please note that no proof is required to be submitted for such address for correspondence/local address. The Bank can verify this address through ‘positive confirmation’ like, acknowledgment of receipt of (i) letter, cheque books, ATM cards; (ii) telephonic conversation; (iii) visits; etc. In case you change your address due to relocation or any other reason, you can intimate the new address for correspondence to the bank within two weeks of such a change.

June 2, 2014: In a recent decision delivered by the Supreme Court of India on 2nd June, 2014 in the matter of Dr. Alloys Wobben and Anr. v. Yogesh Mehra & Ors., the Supreme Court settled the controversy on the issues of multiplicity of proceedings for revocation of patent filed by a party. A Patent is a monopoly right given to a person towards protecting his invention. A person invents something which satisfies the requirements of the Patents Act, 1970 namely, novelty, non-obviousness, inventive steps and industrial application, he is then granted a patent on the same for a period of 20 years from the date of application of the Patent. The patent is thus a monopoly right given to an inventor for a statutory period of 20 years. However, in these twenty years and even before the grant of patent the patent is vulnerable to opposition proceedings and revocation proceedings. A patent could be subjected to a pre-grant opposition (filed before the grant of Patent) as contemplated under Section 25(1) of the Patents Act, 1970 or to a post-grant opposition (filed after the grant of Patent) as contemplated under Section 25(2) of the Patents Act, 1970. A pre-grant opposition can be filed by “any person”. However, a post grant-opposition can only be filed and after the grant of patent and before expiry of one year from the date of grant of patent by “any person interested”. After the expiry of that one year, the patent can be challenged in a revocation proceeding before the Intellectual Property Appellate Board by “any person interested” or by “Central Government” by virtue of Section 64 of the Patents Act, 1970. In case, the Patent holder files a suit for infringement of Patent then the patent can be challenged by the defendant by way of filing of a counter claim under Section 64 of the Patents Act, 1970 before the concerned High Court.

In light of the above scheme of the Patents Act, 1970 the question that came up before the Supreme Court was that: In case, there is already a revocation petition filed by an entity against the grant of patent, then in that case if the patentee files a suit for infringement of patent against the very same entity and that entity files a counter claim towards revocation of patent, which of the two proceedings will prevail?

The Supreme Court mainly relied on the doctrine and principle of res judicata and held that:

If “any person interested” has filed proceedings towards post-grant opposition, the same person would not be entitled to file a “revocation petition” in the capacity of “any person interested” and would also be barred to seek the revocation of a patent in the capacity of a defendant through a “counter-claim” in a suit for infringement of Patent;

If a “revocation petition” has been filed by “any person interested” in prior to the institution of suit for infringement of patent against him, he would be disentitled from revoking the patent through a “counter-claim”; and

If in a suit for infringement of patent, the defendant has already moved a counter claim seeking revocation of patent, the defendant cannot thereafter, in his capacity as “any person interested” file a revocation petitionbefore the Intellectual Property Appellate Board.

May 13, 2014: The European Court of Justice in Google Spain SL, Google Inc. v Agencia Española de Protección de Datos, C-131/12 held that search engine operators are, in certain circumstances, obliged to remove links to web pages that are published by third parties and contain information relating to a person from the list of results displayed following a search made on the basis of that person’s name. Therefore, following a request made by the data subject, if it is found that the inclusion of those links in the list is, at the this point in time, incompatible with the directive, the links and information in the list of results must be erased. The Court also observed that even initially lawful processing of accurate data may, in the course of time, become incompatible with the directive where, having regard to all the circumstances of the case, the data appear to be inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes for which they were processed and in the light of the time that has elapsed. Therefore, the question to be examined is whether the data subject has a right that the information in question relating to him personally should, at this point in time, no longer be linked to his name by a list of results that is displayed following a search made on the basis of his name. If that is the case, the links to web pages containing that information must be removed from that list of results, unless there are particular reasons, such as the role played by the data subject in public life, justifying a preponderant interest of the public in having access to the information when such a search is made.

April 17, 2014: The rules relating to Corporate Governance were notified on March 27, 2014. However, the provisions of the Listing Agreement on this subject were not aligned with the model of corporate governance envisaged under the Companies Act, 2013. Therefore, SEBI has revised the Clause 35B and 49 of the Equity Listing Agreement to incorporate the changes made in the new Companies Act, 2013. The revised clauses are available here ( see Part A & B).

As reported by SEBI, “the revised Clause 49 would be applicable to all listed companies with effect from October 01, 2014. However, the provisions of Clause 49(VI)(C) as given in Part-B shall be applicable to top 100 listed companies by market capitalization as at the end of the immediate previous financial year.” The provisions of Clause 49(VII) as given in Part-B shall be applicable to all prospective transactions. All existing material related party contracts or arrangements which are likely to continue beyond March 31, 2015 shall be placed for approval of the shareholders in the first General Meeting subsequent to October 01, 2014. However, a company may choose to get such contracts approved by the shareholders even before October 01, 2014.